Sunday, December 09, 2007

MAS Essay Writing Competition.

The topic of this year's MAS essay writing competition is "Singapore’s Growing Income Disparities: Causes, Consequences and Policy Options”. Isn't it reassuring that the MAS is really interested in finding out the real cause of income inequality in Singapore? We managed to attained the biggest income gap as measured by the GINI Index among all developed countries. I wanted to give all the credit for this marvelous accomplishment to the PAP govt for its great policies : "Welfare is a dirty word", "GST is to help the poor", "Minimum wages will cause companies to flee", FT & more FT, corporate tax cuts etc etc. ...however, the MAS being the organiser probably doesn't want to be seen taking too much credit for this great accomplishment.
I thought about it for a while and decided that my chances will be far better if I wrote an essay along the following lines:

1. The income gap is cause primarily by globalisation.
2. The PAP has done every thing it can to close the gap.
3. The import of hundreds of thousands of foreign workers does not suppress wages of low income (just found out that the coffeeshop downstairs has fired its 50 yr old coffeeshop helper has been fired and a young china guy [efficient, courteous, energetic] has replaced him. I guess the helper is now freed up for retraining and get a higher paying job later).
4. GST helps the poor and the entire regressive tax regime of recent years is meant to help the poor.
5. Given that income gap has ballooned, the blame can be put squarely on the low income workers couldn;t get themselves upgraded in time for the numerous jobs the PAP the PAP has no choice but to bring in even more foreign workers to fill those jobs.

I think I stand a good chance of winning...what do you think?
While looking for material, I found this speech by Paul Krugman on the creation and destruction of the middleclass & income gap. Krugman suggests that the middleclass is created quickly by the minimum wage, formation of labor unions, progressive taxation on corporate profits, social security etc. It is now being destroyed by a reversal of those policies - the process started in the Regean years. Wonder why Krugman has never been invited to Singapore to speak about our economy.

There is one part of the speech that Krugman didn't get right - he said that the huge disparity in income distribution is unique to America. Oh come on Krugman, you never heard of Singapore? A place with the highest per capita growth in the number of US$ millionaires and rapid deterioration of wages the lowest income group. By all measures, we beat America flat .....


飞起玉龙三百万 said...

Paul Krugman wrote a piece about 10 years back that compare the economic growth of the four dragons in which he concluded that the Singapore miracle is from the increased inputs (labor and capital) and not from productivity (TFP) growth. The implication from (Solow growth) theory is that GDP growth from pumping inputs is not sustainable (law of diminishing returns). Somebody got hot under the collar (including MAS). So it is incorrect to say that Krugman doesn't know about Singapore.

Anonymous said...

It's interesting that you mentioned Krugman in this entry. If you check out Krugman's blog today, you'll see the magic word that explains the income inequality in Singapore, namely, plutocracy.

The worst thing about plutocratic policies is not just that they result in economic inequality but that they kill social mobility. In other words, the descendants of poor folks tend to stay poor while the descendants of rich folks tend to stay rich --- since the playing field is severely weighted against the former and rigged in favor of the latter. I can't think of a greater injustice than that.

Plutocracy is also a stupid unsustainable ideology since it discourages innovation and entrepreneurship. For example, Bill Gates is a product of the American progressive policies in the 60s and 70s; he would certainly not have made it in Singapore. Only people stupid enough to believe in eugenics would believe in plutocracy.

yamizi said...

My mum has been working as a cleaner at this shop along Balestier Road. The working hours are pretty easy. Every Monday morning just go there do the vacuuming, cleaning glass panels, etc.

My mum told me on last Monday her employer told her that they are getting their own maid to do the cleaning, so they will call my mom if they need her.

At age 60, illiterate, got retrenched in this manner...


I love Singapore~

With her CPF locked, as it is on this faithful year that it has annnounce CPF can only be withdraw at 62 (instead of 60).


I love Singapore~

Jolly Jester said...

Yamizi, isn't getting one's foreign maid to do cleaning at other places besides the owner's home supposedly illegal? :-)

Read what Krugman said about Singapore in terms of growth only due to increased inputs... which if is true means its only one off and unsustainable...
There's also the theoretical possibility that we are oversaving and under consuming to fuel this growth?

ser said...

jolly jester, don't you think "input" equates to the influx of foreign talent on our shores? Certainly not a one-off when you consider the government wants to increase our current population to 6mil. (Of course this number can be revised upwards to suit those whose bonuses are pegged to economic growth)

bullshitter said...

the bottom 20% percentile of the populace really don't give a damn about the latest multi million dollar park enhancement in the east or pongol or that new swanky bugis mall coming. they are more worried about whether there is veggies in their next bowl of porridge to even think about makansutra rating on basic hawker food. whereas, the large proportion of middle class is just sitting on the fence. they are neither rich nor poor. the rest belong to the top 20% percentile with enough real assets to retire if they wish.

now this is where the brilliant of the old empire emerged in business suits stratagem shine. firstly, neutralized the large middle class suckers by wasting their vitality so they will least likely to channel their youthful energy to revoke against the establishment. and what better way to do it then putting them on the fence - being neither rich nor poor? but once you past your useful date, as the former generation has found out, your value and worth diminish. no longer are you comfortably perched on the fence. by then, most will not have enough to buy their freedom. but what can you do? you will be an old auntie or uncle like chee unable to rouse the fence seater. so you might as well continue to be agreeable and wash toilets, if need be, to pay for your medical bills etc.

ahh..fence seater, which side will you fall?

i suspect, the percentile will shift as the social demography and demand for goods and services changes. currently, the apathy of the majority fence seater will allow mercenary leadership to exploit the situation in their favor.

it is simply incredible how many actually believe their ruse( globalisation crap and all).

Anonymous said...

The richest man here rides on the property market. No prize for guessing which powerful organization benefited most. Through it, the masses were subdued.

From property con to the next con.

Bill Gates...guess which 'property' he rides on to be the richest man on earth?

Jolly Jester said...

Ser: yes agreed about that other input of foreign talent and the 6 million target.

I am not sure about how their bonuses are linked, is it just straightforward total GDP, or is it per capita GDP? If its total then it doesn't really make sense...

Anonymous said...

PAP sold out the people by letting foreigners take away the well-paying jobs from Singapore citizens.

I just came across a medium-sized company in the knowledge sector that is manned by so many foreign professionals. 95% its employees are foreigners.

PAP certainly has the cheek to ask why there is growing poverty for Singapore citizens. This looks like another of its tricks to mislead Singaporeans. How so?

Essays will be submitted by students. Naturally MAS will pick and choose those essays that put the blame on anything except on the PAP's policies.

Students, the future voters, will thus be persuaded when they read the winner essays that the growing income disparites have to do with things like globalisation or that our people are not competitive enough etc.

It is the same blame game that LKY had been using on the people throughout his rule, even as he absolves himself and his government from any fault.

This time round, there is some fine-tuning to PAP's propaganda. When arguments which are in PAP's favour are advanced by the people themselves, even though they be students, it will not look like traditional political propaganda.

Such is the cunning and egoism of PAP. It wants always to hear good stories about itself, and for the people to think well about PAP.

This policy can only sink PAP deeper and deeper into grave political errors. What PAP is doing is just a repeat of the historical mistakes of all dictatorial regimes.

By being so clever PAP is really a fool. By ignoring the real causes of national problems, they can only escalate.

In the end the chicken will come home to roost. In fact it is already happening. PAP MPs are reporting that they are seeing 60 needy cases a week asking for government assistance as opposed to 40 cases not long ago.

yamizi said...

jolly jester,

The 8th "core value" --- can do anything but don't get caught!

Anyway to be fair the the employer, my mum still going to work, 'cos the maid's not here yet.

The thing is I don't know the maid is foreign maid or what.

Anonymous said...

If you study LKY-PAP method of governance, you eventually recognize it stands out from other countries in one particular way.

It can be simply said that LKY-PAP actually strategises against the people.

It had all along used a "Divide and Rule" strategy on various segments of society - races, education levels, income classes - and thus had been polarizing the people and creating much unhappiness among the people.

This "Divide and Rule" strategy did more than just divide people socially; it actually inflates the egoism of some even while it demeans the human dignity of others. It is diabolical.

The PAP policies and speeches involved in such a strategy are no secret and too many to elucidate here - including those on graduate mother policy, elites vs ordinary people, academic achievements of various races etc.

Apart from "Divide and Rule", PAP has a strategy to keep the people struggling for a living all the time.

Just when things get a little comfortable, it will start to raise the cost of living. It used to do this by imposing and raising taxes & levies like COEs, drastic hikes in rentals of government factories, exorbitant traffic fines and ERP charges.

Nowadays PAP do this by even moving into the area of basic necessities like public housing and health care. It also keeps wages down by further opening the door wider for foreign workers.

It would seem that LKY-PAP believes that if the majority of people achieve a comfortable life, they will start becoming political and might rebel against the regime.

There certainly some truth in this.

LKY said several times that he had learnt much from his Japanese masters, having worked for their secret service during the Jap occupation.

This suggests that he is using the methods of that evil regime to govern the people.

So much then for the title "father of Singapore" that sycophants had conferred on him.

LuckySingaporean said...

anon 10:02,

The only reason why the PAP is worried about people living too well and being too comfortable is they don't want their work ethics to be eroded. From the implementation of shift work in the 80s, the elmination of benefits & the flexiwage system and the hire&fire system of recent times, the whole idea is to keep the populace on its toes. Clearly it is for their own good not to become too lazy and westernised. When wages rose, it was necessary to open the floodgates to foreign labor so that Singaporeans won't have excess wages to lead a comfortable life.

The same cannot be said of the ruling elite. The incorruptible who deserve million $ salaries for their honesty and whose work ethics cannot be eroded by the lack of competition. Although a certain MP-to-be Mr. Sitoh was among the most hardworking, it was only coincidence that he had to compete.

Anonymous said...

Not only globalization crap from the PAP, but also terrorism crap....

I don't think that in other more advanced countries, you get to hear this kind of crap as if to put you in a constant state of fear when there's none.
It's really horrible--and pathetic.

Anonymous said...

One of the hidden reasons why our people are becoming more unhealthy is because over the years we have been subjected to waves and waves of foreign workers who came here with their stresses, not the least of which is their being uprooted from their countries and families.

Singapore is like a rojak cooking pot with the PAP being open to one and sundry without any concern for the social peace and livability.

This is taking its toll on our people, with stress-induced degenerative diseases constantly on the rise.

Being already such a small land, we are yet subjected to the pure economics of PAP.

For many who live long enough, the apparent outward glitz and activity - such as that of Orchard Road or Suntec City - that may temporarily captivate the young or the newcomer is no longer something they think anything about.

Even some FT that I know who used to speak glowingly of Singapore's infrastructure when they first arrived here very soon woke up to the reality : life here is not easy.

We can believe it had all been largely architectured by PAP but never specifically for the overall well-being of the ordinary man in the street.

Anonymous said...

Blame Globalisation and the Government.

Because the Government allowed in thousands of semi-skilled and unskilled foreign workers, as well as highly skilled talents, the former will suppress wages of the lower-income group while the latter will push up salaries of the top earners.

For example, highly sought after talents in banking and fund management etc are not that many and the tendency is for companies to have to pay more to attract such talents. Such people compete on basis of who can pay them higher salaries.

But when it comes to semi-skilled and unskilled workers, the foreign imports in fact pushes down the wages of this segment of Singaporeans because in the words of some foreign workers, they can do the same job better with lower pay as well. Employers will therefore try replacing Singaporeans with foreign workers wherever possible forcing such workers to move into unskilled jobs, even with retraining, further depressing the wages of the unskilled category of workers. These people compete on the basis of who will accept low wages.

The push at the top and the pull at the bottom cannot be denied.

ping said...

the haves and have-nots

though globalisation exacerbates the problem, remember that Singapore is characterized by her small economy.

for the skilled professionals (haves), they just want to go where the money is. and Singapore does a good job to attract them; they keep her economic vibrancy so as not to lose out to other countries.

for the influx of unskilled foreigners.. well I guess it's well-meaning cuz i bet the govt. doesn't want to see her future generations doing such jobs anymore, but move on to do better-paying jobs. have u heard about how much the govt spend on education (look at ITE and polys, they do a great job)?

just that perhaps it takes time to reap the benefits of these policies; in the mean time causing more hardships for some.

and anyway, the PM promised that in recession, the first to bear the brunt will be foreign workers.

hahaha guess i'm pro-foreigner afterall huh?

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May I know the prizes of this essay writing competition. I've seen a different competition earlier. Its different because the prize was a House and Lot.

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juan said...

I found this speech by Paul Krugman on the creation and destruction of the middleclass & income gap. Krugman suggests that the middleclass is created quickly by the minimum wage, formation of labor unions, progressive taxation on corporate profits, social security etc.

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paula said...

well I guess it's well-meaning cuz i bet the govt. doesn't want to see her future generations doing such jobs anymore, but move on to do better-paying jobs. have u heard
Singapore miracle is from the increased inputs (labor and capital) and not from productivity (TFP) growth. The implication from (Solow growth) theory is that GDP growth from pumping inputs is not sustainable (law of diminishing returns)

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